Claim: Under PN, Malta had the worst unemployment rate in Europe and one of the highest fiscal deficits.

Verdict: Malta’s unemployment rate between 2008 and 2013 was higher than today, but still amongst the lowest in Europe. Inactivity rates, on the other hand, were frequently among the highest in Europe but had started dropping by the time PN left office.

A Labour press conference held on Monday afternoon sent people digging through the history books when the two ministers addressing the conference pulled out decade-old data about Malta under the last PN legislature.

Justice minister Jonathan Attard and home affairs minister Byron Camilleri were revealing excerpts from a draft pre-budget document that was prepared by PN but remained unpublished.

Attard and Camilleri claimed that the document was riddled with “factual errors”, including inaccurate numbers about the number of Maltese youth emigrating, the educational levels of young people in Malta and the number of people working in Malta’s financial services industry, amongst other things.

It’s unclear whether these errors would have eventually been ironed out had the document ever been published. But in presenting PN’s mistaken figures, Attard made some mistakes of his own.

“Everyone remembers how under a PN government austerity measures were imposed,” Attard said, pointing to increases in utility bills at the time.  

These measures, Attard continued, led to a situation where “our country had the worst unemployment rate in Europe and, despite austerity, one of the highest fiscal deficits”.

Did Malta really have the worst unemployment rate in Europe?

Not even close, although unemployment was higher than it is today.

EU data shows that when Labour entered office in March 2013, Malta’s unemployment rate stood at 5.8%.

NSO data places this slightly higher, at 6% for the month of March, saying there were a total of 11,259 unemployed people at that point in time.

This is roughly double today’s 3% unemployment rate (and almost 1,500 more unemployed people compared to today), but it was nevertheless the envy of many other European countries at the time.

The only EU countries that had lower unemployment rates in March 2013 were Germany (5%) and Luxembourg (5.7%), with two non-member states, Norway and Switzerland (3.9% and 4.8% respectively), also registering lower unemployment rates.

Malta’s rate at the time was roughly half the EU average of 11.7% and far from the likes of Greece (27.5%) and Spain (26.3%) who propped up the European table.

The same is true if we look at the entirety of the PN legislature between 2008 and 2013, rather than just the point at which the party exited office.

EU data shows that Malta’s unemployment fluctuated between 6% and 7% for much of the five years, peaking at 7.3% in December 2009.

Even at its highest point, Malta’s unemployment rate was amongst the lowest in Europe, with only seven countries registering lower rates.

In any case, Malta’s unemployment rate never even fell below the EU average (which typically hovered around the 10% mark throughout the legislature), let alone lower than all other European countries.

What about people who weren’t unemployed but didn’t want to work?

Unemployment rates measure the number of people who are registered as unemployed, but don’t count people who have no desire to work in the first place.

Rather than unemployed, these people are classified as “inactive”.

Justice minister Jonathan Attard speaking earlier this year. File photo: Jonathan Borg

It’s possible that Attard was referring to inactive people when talking about Malta’s pre-2013 unemployment. But, even then, he wouldn’t be entirely correct, although he’d certainly be much closer.

Malta’s inactivity rate has plummeted in recent years, as more and more women have taken up a career and bolstered Malta’s workforce.

But for much of the time throughout PN’s last two legislatures, between 2003 and 2013, Malta had the highest inactivity rate in Europe, with only Turkey and Hungary occasionally taking Malta’s place at the foot of the table.

At the time, Malta’s inactivity rate frequently topped 40%, peaking at 42.4% during both 2004 and 2005.

By 2012, PN’s last full year in power, this had dipped to 36.1%, still far higher than the EU average of 29%.

But, by then, Malta had climbed up the European table, overtaking a handful of other countries including Italy, North Macedonia, Serbia and Montenegro, aside from Turkey and Hungary.

NSO data suggests that at the time, there were over 173,000 inactive people in Malta (two-thirds of them women), exactly the same number that were in a job.

Malta’s inactivity rate continued to drop over the following decade, dipping under 20% for the first time in 2023, placing it amongst the lowest rates in Europe.

Now finance minister Clyde Caruana presenting the new Labour government's employment policy back in 2014. File photo.

Was Malta’s deficit one of the highest in Europe?

Attard also claimed that Malta had “one of the highest fiscal deficits” under a PN administration.

Anyone who lived through the 2013 election cycle will remember Malta’s deficit as a key issue in a tumultuous electoral campaign.

Malta’s deficit stood at 3.3% in 2012, the PN administration’s last full year, above the EU’s allowed threshold of 3%. This placed Malta under the EU’s excessive deficit procedures, essentially strong-arming Malta to lower its deficit.

But, despite this, Malta’s deficit was nowhere near the highest across the continent, with many countries still reeling from the 2008 financial crisis.

Far from being amongst the highest deficit rates, Malta’s deficit at the time was slightly lower than the EU average of 3.7%, and several times better than Europe’s worst-performing countries, such as Cyprus (15.2%), Spain (11.5%) and Greece (9.3%).

Malta’s deficit was generally below the EU average throughout the last PN legislature, with the exception of 2008, when the country’s deficit rose to 4.1%.

Malta’s deficit had actually topped the European charts a decade earlier, in 2003. With Malta ramping up to join the EU, Malta registered a deficit of 9%, three times higher than the bloc’s average.

Malta would gradually chip away at its deficit over the next years, until it finally registered a surplus for the first time in recent history in 2016.

This came crashing to a halt in 2020, when the Covid-19 pandemic wreaked havoc on economies across Europe. Malta’s deficit soared to 8.7% and has remained well above average ever since, with Malta once again finding itself under excessive deficit procedures.

Verdict

Malta’s unemployment rate during the last PN legislature was higher than today, but still amongst the lowest rates in Europe.

The country’s inactivity rate, on the other hand, was frequently the highest across the continent but had climbed slightly by the time PN left office.

Meanwhile, Malta’s deficit was above the EU’s allowed threshold, just as it is today, but was not amongst the highest in Europe and was generally below the EU average.

The claim is therefore false, as the evidence clearly refutes the claim.

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